122.171
Tax credits to foster job retention.

(1)
"Capital
investment project" means a plan of investment at a project site for the
acquisition, construction, renovation, or repair of buildings, machinery, or
equipment, or for capitalized costs of basic research and new product
development determined in accordance with generally accepted accounting
principles, but does not include any of the following:

(a)
Payments made for the acquisition of personal property through operating
leases;

(c)
Payments made to a related member as defined in section 5733.042 of the Revised
Code or to a consolidated elected taxpayer or a combined taxpayer as defined in
section 5751.01 of the Revised Code.

(2)
"Eligible business" means a taxpayer and its related members with Ohio
operations satisfying all of the following:

(a)
The
taxpayer employs at least five hundred full-time equivalent employees or has an
annual payroll of at least thirty-five million dollars at the time the tax
credit authority grants the tax credit under this section;

(b)
The
taxpayer makes or causes to be made payments for the capital investment project
of one of the following:

(i)
If the
taxpayer is engaged at the project site primarily as a manufacturer, at least
fifty million dollars in the aggregate at the project site during a period of
three consecutive calendar years, including the calendar year that includes a
day of the taxpayer's taxable year or tax period with respect to which the
credit is granted;

(ii)
If the
taxpayer is engaged at the project site primarily in significant corporate
administrative functions, as defined by the director of development services by
rule, at least twenty million dollars in the aggregate at the project site
during a period of three consecutive calendar years including the calendar year
that includes a day of the taxpayer's taxable year or tax period with respect
to which the credit is granted;

(iii)
If the taxpayer is applying to enter into an agreement for a tax credit
authorized under division (B)(3) of this section, at least five million dollars
in the aggregate at the project site during a period of three consecutive
calendar years, including the calendar year that includes a day of the
taxpayer's taxable year or tax period with respect to which the credit is
granted.

(c)
The taxpayer
had a capital investment project reviewed and approved by the tax credit
authority as provided in divisions (C), (D), and (E) of this section.

(3)
"Full-time
equivalent employees" means the quotient obtained by dividing the total number
of hours for which employees were compensated for employment in the project by
two thousand eighty. "Full-time equivalent employees" shall exclude hours that
are counted for a credit under section 122.17 of the Revised Code.

(4)
"Income tax revenue" means the total amount withheld under section 5747.06 of
the Revised Code by the taxpayer during the taxable year, or during the
calendar year that includes the tax period, from the compensation of all
employees employed in the project whose hours of compensation are included in
calculating the number of full-time equivalent employees.

(5)
"Manufacturer" has the same meaning as in section 5739.011 of the Revised
Code.

(6)
"Project
site" means an integrated complex of facilities in this state, as specified by
the tax credit authority under this section, within a fifteen-mile radius where
a taxpayer is primarily operating as an eligible business.

(7)
"Related member" has the same meaning as in section 5733.042 of the Revised
Code as that section existed on the effective date of its amendment by Am. Sub.
H.B. 215 of the 122nd general assembly, September 29, 1997.

(8)
"Taxable year" includes, in the case of a domestic or foreign insurance
company, the calendar year ending on the thirty-first day of December preceding
the day the superintendent of insurance is required to certify to the treasurer
of state under section 5725.20 or 5729.05 of the Revised Code the amount of
taxes due from insurance companies.

(B)
The
tax credit authority created under section 122.17 of the Revised Code may grant
tax credits under this section for the purpose of fostering job retention in
this state. Upon application by an eligible business and upon consideration of
the recommendation of the director of budget and management, tax commissioner,
the superintendent of insurance in the case of an insurance company, and
director of development services under division (C) of this section, the tax
credit authority may grant the following credits against the tax imposed by
section 5725.18, 5726.02, 5729.03, 5733.06, 5736.02, 5747.02, or 5751.02 of the Revised Code:

(2)
A
refundable credit to an eligible business meeting the following conditions,
provided that the director of budget and management, tax commissioner,
superintendent of insurance in the case of an insurance company, and director
of development services have recommended the granting of the credit to the tax
credit authority before July 1, 2011:

(a)
The
business retains at least one thousand full-time equivalent employees at the
project site.

(b)
The business
makes or causes to be made payments for a capital investment project of at
least twenty-five million dollars in the aggregate at the project site during a
period of three consecutive calendar years, including the calendar year that
includes a day of the business' taxable year or tax period with respect to
which the credit is granted.

(c)
In
2010, the business received a written offer of financial incentives from
another state of the United States that the director determines to be
sufficient inducement for the business to relocate the business' operations
from this state to that state.

(3)
A
refundable credit to an eligible business with a total annual payroll of at
least twenty million dollars, provided that the tax credit authority grants the
tax credit on or after July 1, 2011, and before January 1, 2014.

The credits authorized in
divisions (B)(1), (2), and (3) of this section may be granted for a period up
to fifteen taxable years or, in the case of the tax levied by section
5736.02 or 5751.02 of the Revised Code, for a
period of up to fifteen calendar years. The credit amount for a taxable year or
a calendar year that includes the tax period for which a credit may be claimed
equals the income tax revenue for that year multiplied by the percentage
specified in the agreement with the tax credit authority. The percentage may
not exceed seventy-five per cent. The credit shall be claimed in the order
required under section 5725.98, 5726.98, 5729.98, 5733.98, 5747.98, or 5751.98
of the Revised Code. In determining the percentage and term of the credit, the
tax credit authority shall consider both the number of full-time equivalent
employees and the value of the capital investment project. The credit amount
may not be based on the income tax revenue for a calendar year before the
calendar year in which the tax credit authority specifies the tax credit is to
begin, and the credit shall be claimed only for the taxable years or tax
periods specified in the eligible business' agreement with the tax credit
authority. In no event shall the credit be claimed for a taxable year or tax
period terminating before the date specified in the agreement. Any credit
granted under this section against the tax imposed by section 5733.06 or
5747.02 of the Revised Code, to the extent not fully utilized against such tax
for taxable years ending prior to 2008, shall automatically be converted
without any action taken by the tax credit authority to a credit against the
tax levied under Chapter 5751. of the Revised Code for tax periods beginning on
or after July 1, 2008, provided that the person to whom the credit was granted
is subject to such tax. The converted credit shall apply to those calendar
years in which the remaining taxable years specified in the agreement
end.

If a nonrefundable credit
allowed under division (B)(1) of this section for a taxable year or tax period
exceeds the taxpayer's tax liability for that year or period, the excess may be
carried forward for the three succeeding taxable or calendar years, but the
amount of any excess credit allowed in any taxable year or tax period shall be
deducted from the balance carried forward to the succeeding year or
period.

(C)
A
taxpayer that proposes a capital investment project to retain jobs in this
state may apply to the tax credit authority to enter into an agreement for a
tax credit under this section. The director of development services shall
prescribe the form of the application. After receipt of an application, the
authority shall forward copies of the application to the director of budget and
management, the tax commissioner, the superintendent of insurance in the case
of an insurance company, and the director of development services, each of whom
shall review the application to determine the economic impact the proposed
project would have on the state and the affected political subdivisions and
shall submit a summary of their determinations and recommendations to the
authority.

(D)
Upon review
and consideration of the determinations and recommendations described in
division (C) of this section, the tax credit authority may enter into an
agreement with the taxpayer for a credit under this section if the authority
determines all of the following:

(1)
The
taxpayer's capital investment project will result in the retention of
employment in this state.

(2)
The
taxpayer is economically sound and has the ability to complete the proposed
capital investment project.

(3)
The
taxpayer intends to and has the ability to maintain operations at the project
site for at least the greater of (a) the term of the credit plus three years,
or (b) seven years.

(4)
Receiving
the credit is a major factor in the taxpayer's decision to begin, continue
with, or complete the project.

(5)
If
the taxpayer is applying to enter into an agreement for a tax credit authorized
under division (B)(3) of this section, the taxpayer's capital investment
project will be located in the political subdivision in which the taxpayer
maintains its principal place of business or maintains a unit or division with
at least four thousand two hundred employees at the project site.

(E)
An agreement
under this section shall include all of the following:

(1)
A
detailed description of the project that is the subject of the agreement,
including the amount of the investment, the period over which the investment
has been or is being made, the number of full-time equivalent employees at the
project site, and the anticipated income tax revenue to be generated.

(2)
The
term of the credit, the percentage of the tax credit, the maximum annual value
of tax credits that may be allowed each year, and the first year for which the
credit may be claimed.

(3)
A
requirement that the taxpayer maintain operations at the project site for at
least the greater of (a) the term of the credit plus three years, or (b) seven
years.

(a)
In
the case of a credit granted under division (B)(1) of this section, a
requirement that the taxpayer retain at least five hundred full-time equivalent
employees at the project site and within this state for the entire term of the
credit, or a requirement that the taxpayer maintain an annual payroll of at
least thirty-five million dollars for the entire term of the credit;

(b)
In
the case of a credit granted under division (B)(2) of this section, a
requirement that the taxpayer retain at least one thousand full-time equivalent
employees at the project site and within this state for the entire term of the
credit;

(c)
In the case
of a credit granted under division (B)(3) of this section, either of the
following:

(i)
A
requirement that the taxpayer retain at least five hundred full-time equivalent
employees at the project site and within this state for the entire term of the
credit and a requirement that the taxpayer maintain an annual payroll of at
least twenty million dollars for the entire term of the credit;

(ii)
A
requirement that the taxpayer maintain an annual payroll of at least
thirty-five million dollars for the entire term of the credit.

(5)
A
requirement that the taxpayer annually report to the director of development
services employment, tax withholding, capital investment, and other information
the director needs to perform the director's duties under this
section.

(6)
A
requirement that the director of development services annually review the
annual reports of the taxpayer to verify the information reported under
division (E)(5) of this section and compliance with the agreement. Upon
verification, the director shall issue a certificate to the taxpayer stating
that the information has been verified and identifying the amount of the credit
for the taxable year or calendar year that includes the tax period. In
determining the number of full-time equivalent employees, no position shall be
counted that is filled by an employee who is included in the calculation of a
tax credit under section 122.17 of the Revised Code.

(7)
A
provision providing that the taxpayer may not relocate a substantial number of
employment positions from elsewhere in this state to the project site unless
the director of development services determines that the taxpayer notified the
legislative authority of the county, township, or municipal corporation from
which the employment positions would be relocated.

For purposes of this
section, the movement of an employment position from one political subdivision
to another political subdivision shall be considered a relocation of an
employment position unless the movement is confined to the project site. The
transfer of an employment position from one political subdivision to another
political subdivision shall not be considered a relocation of an employment
position if the employment position in the first political subdivision is
replaced by another employment position.

(8)
A
waiver by the taxpayer of any limitations periods relating to assessments or
adjustments resulting from the taxpayer's failure to comply with the
agreement.

(F)
If a
taxpayer fails to meet or comply with any condition or requirement set forth in
a tax credit agreement, the tax credit authority may amend the agreement to
reduce the percentage or term of the credit. The reduction of the percentage or
term may take effect in the current taxable or calendar year.

(G)
Financial statements and other information submitted to the department of
development services or the tax credit authority by an applicant for or
recipient of a tax credit under this section, and any information taken for any
purpose from such statements or information, are not public records subject to
section 149.43 of the Revised Code. However, the chairperson of the authority
may make use of the statements and other information for purposes of issuing
public reports or in connection with court proceedings concerning tax credit
agreements under this section. Upon the request of the tax commissioner, or the
superintendent of insurance in the case of an insurance company, the
chairperson of the authority shall provide to the commissioner or
superintendent any statement or other information submitted by an applicant for
or recipient of a tax credit in connection with the credit. The commissioner or
superintendent shall preserve the confidentiality of the statement or other
information.

(H)
A taxpayer
claiming a tax credit under this section shall submit to the tax commissioner
or, in the case of an insurance company, to the superintendent of insurance, a
copy of the director of development services' certificate of verification under
division (E)(6) of this section with the taxpayer's tax report or return for
the taxable year or for the calendar year that includes the tax period. Failure
to submit a copy of the certificate with the report or return does not
invalidate a claim for a credit if the taxpayer submits a copy of the
certificate to the commissioner or superintendent within sixty days after the
commissioner or superintendent requests it.

(I)
For
the purposes of this section, a taxpayer may include a partnership, a
corporation that has made an election under subchapter S of chapter one of
subtitle A of the Internal Revenue Code, or any other business entity through
which income flows as a distributive share to its owners. A partnership,
S-corporation, or other such business entity may elect to pass the credit
received under this section through to the persons to whom the income or profit
of the partnership, S-corporation, or other entity is distributed. The election
shall be made on the annual report required under division (E)(5) of this
section. The election applies to and is irrevocable for the credit for which
the report is submitted. If the election is made, the credit shall be
apportioned among those persons in the same proportions as those in which the
income or profit is distributed.

(J)
If
the director of development services determines that a taxpayer that received a
certificate under division (E)(6) of this section is not complying with the
requirement under division (E)(3) of this section, the director shall notify
the tax credit authority of the noncompliance. After receiving such a notice,
and after giving the taxpayer an opportunity to explain the noncompliance, the
authority may terminate the agreement and require the taxpayer, or any related
member or members that claimed the tax credit under division (N) of this
section, to refund to the state all or a portion of the credit claimed in
previous years, as follows:

(1)
If the
taxpayer maintained operations at the project site for less than or equal to
the term of the credit, an amount not to exceed one hundred per cent of the sum
of any tax credits allowed and received under this section.

(2)
If
the taxpayer maintained operations at the project site longer than the term of
the credit, but less than the greater of (a) the term of the credit plus three
years, or (b) seven years, the amount required to be refunded shall not exceed
seventy-five per cent of the sum of any tax credits allowed and received under
this section.

In determining the
portion of the credit to be refunded to this state, the authority shall
consider the effect of market conditions on the taxpayer's project and whether
the taxpayer continues to maintain other operations in this state. After making
the determination, the authority shall certify the amount to be refunded to the
tax commissioner or the superintendent of insurance. If the taxpayer, or any
related member or members who claimed the tax credit under division (N) of this
section, is not an insurance company, the commissioner shall make an assessment
for that amount against the taxpayer under Chapter 5726., 5733.,
5736., 5747., or 5751. of the Revised Code. If
the taxpayer, or any related member or members that claimed the tax credit
under division (N) of this section, is an insurance company, the superintendent
of insurance shall make an assessment under section 5725.222 or 5729.102 of the
Revised Code. The time limitations on assessments under those chapters and
sections do not apply to an assessment under this division, but the
commissioner or superintendent shall make the assessment within one year after
the date the authority certifies to the commissioner or superintendent the
amount to be refunded.

(K)
The
director of development services, after consultation with the tax commissioner
and the superintendent of insurance and in accordance with Chapter 119. of the
Revised Code, shall adopt rules necessary to implement this section. The rules
may provide for recipients of tax credits under this section to be charged fees
to cover administrative costs of the tax credit program. The fees collected
shall be credited to the business assistance fund created in section 122.174 of
the Revised Code. At the time the director gives public notice under division
(A) of section 119.03 of the Revised Code of the adoption of the rules, the
director shall submit copies of the proposed rules to the chairpersons of the
standing committees on economic development in the senate and the house of
representatives.

(L)
On or before
the first day of August of each year, the director of development services
shall submit a report to the governor, the president of the senate, and the
speaker of the house of representatives on the tax credit program under this
section. The report shall include information on the number of agreements that
were entered into under this section during the preceding calendar year, a
description of the project that is the subject of each such agreement, and an
update on the status of projects under agreements entered into before the
preceding calendar year.

(1)
The
aggregate amount of tax credits issued under division (B)(1) of this section
during any calendar year for capital investment projects reviewed and approved
by the tax credit authority may not exceed the following amounts:

(b)
For
2011 through 2023, the amount of the limit for the preceding calendar year plus
thirteen million dollars;

(c)
For
2024 and each year thereafter, one hundred ninety-five million
dollars.

(2)
The
aggregate amount of tax credits authorized under divisions (B)(2) and (3) of
this section and allowed to be claimed by taxpayers in any calendar year for
capital improvement projects reviewed and approved by the tax credit authority
in 2011, 2012, and 2013 combined shall not exceed twenty-five million dollars.
An amount equal to the aggregate amount of credits first authorized in calendar
year 2011, 2012, and 2013 may be claimed over the ensuing period up to fifteen
years, subject to the terms of individual tax credit agreements.

The limitations in
division (M) of this section do not apply to credits for capital investment
projects approved by the tax credit authority before July 1, 2009.

(N)
This
division applies only to an eligible business that is part of an affiliated
group that includes a diversified savings and loan holding company or a
grandfathered unitary savings and loan holding company, as those terms are
defined in section 5726.01 of the Revised Code. Notwithstanding any contrary
provision of the agreement between such an eligible business and the tax credit
authority, any credit granted under this section against the tax imposed by
section 5725.18, 5729.03, 5733.06, 5747.02, or 5751.02 of the Revised Code to
the eligible business, at the election of the eligible business and without any
action by the tax credit authority, may be shared with any member or members of
the affiliated group that includes the eligible business, which member or
members may claim the credit against the taxes imposed by section 5725.18,
5726.02, 5729.03, 5733.06, 5747.02, or 5751.02 of the Revised Code. Credits
shall be claimed by the eligible business in sequential order, as applicable,
first claiming the credits to the fullest extent possible against the tax that
the certificate holder is subject to, then against the tax imposed by,
sequentially, section 5729.03, 5725.18, 5747.02, 5751.02, and lastly 5726.02 of
the Revised Code. The credits may be allocated among the members of the
affiliated group in such manner as the eligible business elects, but subject to
the sequential order required under this division. This division applies to
credits granted before, on, or after March 27, 2013, the effective date of H.B.
510 of the 129th general assembly. Credits granted before that effective date
that are shared and allocated under this division may be claimed in those
calendar years in which the remaining taxable years specified in the agreement
end.

As used in this division,
"affiliated group" means a group of two or more persons with fifty per cent or
greater of the value of each person's ownership interests owned or controlled
directly, indirectly, or constructively through related interests by common
owners during all or any portion of the taxable year, and the common owners.
"Affiliated group" includes, but is not limited to, any person eligible to be
included in a consolidated elected taxpayer group under section 5751.011 of the
Revised Code or a combined taxpayer group under section 5751.012 of the Revised
Code.